Even in times of relative calm, employers sometimes feel that every personnel decision carries the risk of legal liability. Of course, in times of crisis, an employer must often act decisively to protect its business and its reputation.
The following case is a cautionary tale about decisive action and one type of legal risk: defamation claims. Although this particular case turned on a legal technicality, it’s useful to show how communicating about your reasons for taking an adverse action can turn into litigation.
Steward Carney Hospital operated an adolescent psychiatric unit. In April 2011, there were four incidents of patient abuse or neglect in the unit. The hospital immediately notified the Massachusetts Department of Mental Health (DMH), the state agency that issued its operating license. An investigation began, admissions were halted, and employees were placed on administrative leave. In addition, DMH considered revoking the hospital’s license for operating the unit.
The hospital hired an outside lawyer, a former state attorney general, to investigate, recommend remedial actions, and represent the hospital in its dealings with state agencies. The lawyer ultimately recommended to the then-hospital president that all of the unit’s staff be replaced because of their “code of silence.” Apparently, the staff was reluctant to cooperate in parts of the investigation.
The hospital president took the lawyer’s advice. After he notified each of the affected employees that they had been terminated (including the nurses who later filed suit), the president sent all hospital staff an e-mail that contained this passage:
Recently, I have become aware of the alleged incidents where a number of [hospital] staff have not demonstrated . . . steadfast commitment to patient care. I have thoroughly investigated these allegations and have determined that these individual employees have not been acting in the best interest of their patients, the hospital, or the community we serve.
As a result, I have terminated the employment of each of these individuals.
In a Boston Globe article 2 days after the firings, the hospital president was quoted as saying that the investigator had recommended that he “start over on the unit” and his “goal [was] to make it the best unit in the state.” Approximately 1 month later, the Boston Globe published another article on the incidents at the hospital in which the president stated that “the [investigator’s] report indicated it wasn’t a safe situation” and that the report “underscored his decision to fire the entire staff of the unit.”
The DMH’s investigative reports on the incidents ultimately concluded that there had been wrongdoing by a single mental health counselor in three of the incidents. The report on the fourth incident concluded that “unspecified staff” on duty during the incident had acted improperly.
‘We Were Defamed!’
Several of the fired nurses filed a defamation suit against the hospital over its president’s staffwide e-mail and his statements in the two Boston Globe articles. The hospital immediately sought to dismiss the suit on what might be considered a legal technicality, contending that the nurses’ lawsuit was a meritless claim brought to quell the hospital’s exercise of legitimate “petitioning activity”—i.e., a so-called strategic lawsuit against public participation (SLAPP) claim. As a result, the hospital argued, it was entitled to a special motion to dismiss the lawsuit under the Massachusetts SLAPP statute, Mass. Gen. L. Ch. 231, § 59H.
The trial court judge denied the motion, finding that neither the e-mail nor the president’s statements to the Globe constituted petitioning activity under Ch. 231. The hospital then appealed the trial court’s decision to the Massachusetts Appeals Court and, when it lost there, to Massachusetts’ highest court, the Supreme Judicial Court (SJC). The SJC also ruled against the hospital, concluding that the e-mail wasn’t protected petitioning activity under the SLAPP statute.
After the appeals, the case returned to the trial court, and it fell to a new trial court judge to decide if the nurses had a viable claim of defamation against the hospital based on the president’s comments to the Boston Globe. The judge found that the nurses’ primary purpose in suing the hospital for defamation appeared to be to redress the harm they had allegedly suffered. Accordingly, the judge ruled that the nurses’ defamation lawsuit against the hospital wasn’t a SLAPP suit, and it should be allowed to proceed.
Case for Disclosing Reasons for Adverse Action
The hospital is now facing litigation based on its public statements about its reasons for terminating some of its employees. Keep in mind that the decision in this case doesn’t change the general rule in defamation cases that an employer’s statements are not defamatory if they are true, reasonably related to its business interests, and not made with actual malice. So it’s possible that the hospital will prevail in the defamation lawsuit.
It’s worth noting that an employer may have a whole host of valid reasons for wanting to disclose why it terminated or disciplined a worker. Those reasons include:
- Closing the loop on an investigation that might have involved numerous employees;
- Deterring future misconduct; and
- Reassuring employees who didn’t engage in misconduct about their own job security.
Nonetheless, you should exercise caution when making public statements about the reasons for your employment decisions. Blanchard, et al. v. Steward Carney Hospital, Inc., et al. (Suffolk Superior Court, 2017).
Think long and hard about sending mass e-mails or commenting to the media about personnel actions that you take in times of crisis. In either forum, it can be easy for important details to get lost in translation. You should be thoughtful when deciding whether to disclose your reasons for disciplining an employee, and make sure your legitimate business interests override the risk of litigation.
As this case illustrates, the risk of defamation claims is real when personnel actions “go public.” The hospital may ultimately win this case, but it will take a lot of time and money. Many employers cannot afford to squander either.
From a strictly legal standpoint, this case turns on Massachusetts’ anti-SLAPP statute, which doesn’t generally apply to employment law, and the history of this case involves separate decisions by the Massachusetts Appeals Court and the SJC. This article focuses on the practical pointers for our nonattorney readers rather than on the finer points of the legal analysis by our courts.